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Highlighted points 1. building a strong, loyal customer community This allows Costco to
enjoy recurrent,2. recession-proof revenue, and to get most of its operating profit 12 months
in advance via annual membership fees.
Sam's Club may be failing to capture market share from Costco. This is because
Costco, apart from offering slightly lower price points on certain key products, is
trying to improve its customer experience by implementing kind return policies,
accepting several payment methods, and adding gift prizes. More importantly, Costco
is always changing its brands and introducing new products in order to provide
customers with a pleasant "treasure hunt" experience.
The best part of the story is that although membership fees have increased over time, Costco is
having no problem in expanding its membership network. In the fourth quarter of 2013, new
membership increased 4%, taking the number of members to more than 71 million.
Furthermore, most customers are satisfied with Costco's discounts and decide to renew their
membership, as evidenced by the recent upsurge in annual membership renewals. In this way,
Costco's main profit source is not only improving, it is also recurrent.
Costco on the other hand targets individuals with higher disposable incomes and is able to
generate much higher revenues per square foot of space. Hence, it does not need a significant
online business to increase efficiency.
Since the first Wal-Mart Supercenter (hereafter WMS) opened in Washington, Missouri in 1988, the expansion of WMS entry into
food retail markets has induced significantly lower market prices as well as some consumers switching away from incumbent
supermarkets.Besides the low prices for individual food items, economies of scale have supported WMS penetration, as a typical
WMS sells over 100,000 products under one roof, thereby introducing the convenience of one-stop shopping. On the supply side,
operating large, multiple units near one another benefits its profit by splitting the cost of operation, delivery, and advertising
among nearby outlets and sharing knowledge of local marketswhen WMS emerges and optimally locates their stores across all
markets. Because all players are assumed to have complete information, incumbent supermarkets are well informed about the
payoff structure of WMS. They respond to its entry by price reductions with the hope of maintaining their market share and a
fixed profit goal.1 Meanwhile, WMS is assumed to be aware that incumbent chains' reaction is a well defined function of its entry
decisions, so it will optimally make its entry decision by incorporating rival chains' reactions. The corresponding profit margin is
specified as the marginal contribution of dollar sales to the profit function. Once WMS makes its entry decisions, all profits are
realized and thereby one can estimate profit margins directly from parameter estimates of the profit function.Empirical results
show that Wal-Mart's entry accounts for an average decrease of 50% in profit margins for incumbent supermarkets in the
transition from the first to the second stage. The profit of incumbent supermarkets in the second stage is not significantly
different from zero. The competition between incumbent supermarkets is found to be only 45% of their degree of competition
with respect to WMS, which may imply the possibility of tacit collusion among incumbent supermarkets in response to the
presence of WMS in food markets.WMSs decrease prices by 6-7% for national brands and 3-7% for private label products by
focusing on the competitive price effects of six WMSs on national brand and private label supermarket prices in New England.
Stone (1995), and Artz and Stone (2006) point out that WMSs have a greater impact on local food stores in metropolitan areas
than in rural ones, causing on average 8% loss in sales at metropolitan food stores and approximately 4% at rural
ones.Conclusion- the expansion of WMS accounts for significant decreases in profit margins for all incumbent
supermarkets.These results reinforce the concerns raised by the public and especially by the workforce of incumbent
supermarkets. The presence of economies of scale is found to generate substantial benefits for all retailers and exhibits a more
important influence on the profitability of WMSs than on incumbent supermarkets.incumbent supermarkets is found to be only
44.5% of the competition effect that they impose on WMS, which implies a possibility of collusion among incumbent
Walmart Supercenters offer a one-stop shopping experience by combining a grocery store with
fresh produce, bakery, deli and dairy products with electronics, apparel, toys and home
furnishings. Most Supercenters are open 24 hours, and may also include specialty shops such as
banks, hair and nail salons, restaurants, or vision centers.
advertising poster about vacancy attached hereby along
with resume please find.
I am B.E with MBA in Chemical Engineering currently
working on Techno Commercial profile at
TSM TheSafetyMaster Pvt Ltd. Its an industrial safety
based company i ensure the successful delivery of all the
projects, responsible for successive bussiness leads,
Client management and relationship apart from this
generating new ideas and improvement points from client
site or from communication with customers are my key
roles.
Referral-
Rajan Sharma, BLT at Gujarat Fluorochemicals(
Noida office), is a former college friend. He suggested me
to reach out to you about potential opportunity in your
organisation, and he thought I'd be a good match,
Kindly find attached resume for review